Barbarians at the Gate (4 page)

Johnson found Standard Brands hopelessly outdated. This was the age of marketing, of
movement,
and these people were trafficking in fats and oils. The Canadian subsidiary was a mess. Johnson, the ex-Pesketteer, hit Standard Brands Canada like a hurricane. In his first year, he bounced
twenty-one of the top twenty-three executives, and to replace them he looked for the kind of free-spirited young men he had attracted throughout his career. Peter Rogers, an Englishman working for a Canadian candy company, had a reputation as a brilliant, profane loose cannon. “No fucking way,” Rogers said when first approached by Johnson. “Your company treats people terribly, and it’s messed up every acquisition it’s ever made.” But Rogers came; he would stay with Johnson for fifteen years. Johnson also snagged Martin Emmett, an aristocratic South African, who canceled a transfer to Australia to join Johnson’s growing band of Merry Men. In later years the two became so close they were dubbed “Martini and Rossi.”

The pair became the core of Johnson’s rogue managers, dedicated to shaking up Standard Brands Canada by day and draining bottles of spirits by night. Johnson assigned them nicknames: Rogers was “The Rook,” for Canadian Olympic Drinking Team rookie; Emmett was “The Big E,” for his lanky frame. Jim Westcott, a personnel consultant, was “Buddha,” for his girth and wisdom. Johnson himself was “The Pope.”

As in Toronto, Johnson proved himself adept at working his way into Montreal society. Paul Desmarais, the influential chairman of a big manufacturer, Power Corporation, sponsored Johnson’s membership in the exclusive Mount Royal Club and introduced him to the tight-knit Montreal business community. Among Johnson’s new friends was a young lawyer named Brian Mulroney, who would go on to become Canada’s prime minister. His confidence building, Johnson settled into a routine that would endure for fifteen years—staying up until all hours with his pals, talking business, sipping Scotch, and smoking cigars. Unorthodox, yes, but his guerrilla band produced results, and it got Johnson noticed. In 1973, he was promoted to head Standard Brands’s international operations.

He moved to New York. Cocksure, buoyant, bubbly, Johnson was utterly unintimidated by the city. He felt he had been born to the moment. To his peers at Standard Brands’s headquarters, Johnson was a brash upstart, an overnight success. They knew nothing of the hardscrabble childhood in the provinces, the twenty-one years of anonymity. In fact, Johnson was the consummate late bloomer, a man who at age forty-two was only now starting to find his stride in life.

He bought a house in the tony Connecticut suburb of New Canaan,
and secured a sought-after seat on the New Canaan Club Car, a hangout for executives that was attached to the end of the 7:30 New Haven Railroad run. There, amid comforts not available to the average commuter, Johnson was introduced to a high-powered group, men such as Rawleigh Warner, the chairman of Mobil Oil. Every morning they played bridge, read the morning newspapers, talked business. Johnson’s long brown hair, wide ties, and pigskin coats stood out, and the other executives—every hair in place, every other suit pin-striped—rode him unmercifully. The mod young Canadian would jovially give it right back. “You old stiffs, you old farts,” he would say, “The world has gone right by you.”

Johnson’s new boss, Henry Weigl, though, was no joking matter. Weigl was a tyrant who ran a tight, spartan company. His proudest accomplishment was a twenty-year string of annual profit increases since becoming president in the 1950s. He did it in part by making certain results went up each year just so much and no more. That way the company wouldn’t be hard-pressed to top its performance the following year. It also helped that Weigl could pinch a penny until it screamed.

Unlike the posh corporate headquarters that dotted midtown Manhattan, Standard Brands’s offices were stark: linoleum floors and steel desks. Only the highest echelon qualified for carpeting and wooden desks. The rotary phone dials were locked at five each afternoon to prevent after-hours personal calls. When Standard Brands managers traveled, they were required not only to fly coach, but also to take the cheapest form of transit to the airport—a bus. On the road they stayed at Howard Johnson motels, because that chain’s restaurants were major customers for Chase & Sanborn. Weigl’s tightfistedness extended to big-ticket items as well. When a Standard Brands director and investment banker named Andrew G. C. Sage II put together an acquisition for the company, he was stunned to receive a letter from Weigl saying, in essence, “Thank you for the donation of your time.” Sage tore up the bill he had been preparing.

Unlike the garrulous Johnson, Weigl spent so much time holed up in his office he was known as “Henry the Hermit.” Subordinates lived in fear of being summoned inside. Johnson once sat in on the tongue-lashing of a junior executive. The victim was excused, and Johnson remained to talk with Weigl for a moment. When he came out, the poor fellow was lying spent in the hall, hyperventilating. Weigl once thought he saw the head of the tax department sneaking out of work early. He told an aide to investigate and fire the man. The aide came back to him and said he must
be mistaken; the man had been working late. “Look,” Weigl snapped, “you can either fire him or fire yourself.” (No one was ultimately fired, but people on Weigl’s floor began tiptoeing downstairs to catch the elevator at the next floor at day’s end.) At a Christmas party, Weigl observed an executive who he thought rather too jolly. He ordered Johnson to fire him—before Christmas. Johnson did the deed but softened the blow by giving the executive and his family a vacation trip to Canada. “Fogged it,” as he described the tactic.

Soon Johnson was getting pretty good at fogging it. When senior vice president Lester Applegate was forced out by Weigl, Johnson hid him on the Canadian payroll. At first Johnson managed to avoid Weigl’s wrath. He delivered results and was out of the country half the time visiting the company’s far-flung international operations. But Johnson’s flamboyant style guaranteed an eventual collision with his indomitable boss.

As phone locks clicked on, ending each Standard Brands day, Johnson’s second shift was just beginning. Always drawn to celebrities, he soon befriended the former football star Frank Gifford, then announcing “Monday Night Football” and pitching ads for Standard Brands’s Dry Sack sherry. The two men took to hanging out at Manuche’s, the successor to Toots Shor’s as the prime watering hole for New York’s sporting elite. Johnson was a hopeless sports nut, and through Gifford he met an array of big names: football commissioner Pete Rozelle; race-car mogul Roger Penske; broadcast buddy Don Meredith; Roone Arledge, who headed ABC Sports; Don Ohlmeyer, his crack producer; and a young man Arledge and Ohlmeyer shared as protégé, John Martin. Johnson and Gifford grew so close they began working together on an annual charity banquet called Dinner of Champions, where people paid a lot of money to mingle with Gifford’s starry friends. The Giffer, the glitz, the contacts: Johnson thrived.

Beaten-down Standard Brands executives rallied around this buoyant newcomer. Senior managers had to endure an all-day meeting with Weigl once a month. Johnson repaired their spirits afterward by leading all-night drinking sessions he called “The Monday Evening Wrecking Club.”

So, too, did he become a favorite of the Standard Brands board. In contrast to the prickly Weigl, Johnson talked with board members casually and comfortably. They rewarded him by naming him a director in 1974 and promoting him to president a year later. Weigl, sniffing a challenge to his power, did a slow burn. He forbade contacts between
directors and executives outside his presence. When one of the directors, a New York lawyer named Watt Dunnington, gave a cocktail party and invited Johnson and the company’s general counsel, Weigl was furious at all of them.

Johnson thought Weigl was looking for ways to trip him up. He was given a Mission Impossible: sell the company’s hapless chemicals division. Miraculously, he drew an offer of $23 million. Stubbornly, Weigl wouldn’t sell it for less than $24 million. Deftly, Johnson struck a side deal. The buyer would pay $24 million, but get $1 million of it right back under the table from a Standard Brands subsidiary. Weigl, not knowing about part two of the deal, approved it. “My greatest sale,” Johnson would recall.

In January 1976, the board named Johnson chief operating officer, making him Weigl’s heir apparent. Many employees cheered the coming emancipation—but not all. Weigl received two anonymous letters from Canadian staffers complaining of lavish spending—Martin Emmett’s three company cars and chauffeur, say—and expense-account abuses. Weigl, who had torpedoed successors before, jumped on it. He dispatched a team of auditors to Canada. The going was slow. But eventually Weigl learned of Johnson’s huge New York limo tab, which the company was picking up. He began gathering information on Johnson’s extramarital affairs—fertile territory, with Johnson’s first marriage on the rocks.

Johnson, meanwhile, prepared for war. A headhunter who gathered employee intelligence for Weigl became a double agent, also reporting to Johnson. A gathering of conspirators descended upon Johnson’s New Canaan home over several weekends: Peter Rogers from Chicago, where he now ran the Planters Nut and Curtiss Candy businesses; Martin Emmett from Toronto, where he headed Standard Brands Canada; and Ruben Gutoff, a senior vice president, from New York. Together they assembled a report that would show how Weigl’s tightfisted ways were slowly strangling Standard Brands. As for the tail on Johnson, two could play that game. Soon, Weigl was pretty sure
he
was being followed.

Then, a spark. Johnson had allowed an executive fired by Weigl to exercise his stock options after leaving the company. When Weigl found out, he was furious. He hadn’t fired the man to see him profit on stock options. He called up Johnson, who was out of town, and gave him ten kinds of hell. Johnson should have canceled those options, Weigl stormed…and stormed…and stormed. Exercising those options had been totally legitimate, Johnson protested, and blocking it would have been
against the law. “We’ll write our own law,” Weigl declared.

Finally Johnson could take it no longer. “Henry, you can take it and shove it,” he said, and hung up.

The breech was now total, and that afternoon Johnson phoned two of the board’s most powerful members to tell them so. “Look, I’m gone,” he told Ellmore (“Pat”) Patterson, chairman of Morgan Guaranty Trust. “This guy is completely mad. I figured I could hold it and hold it, but I can’t anymore.” He made the same speech to Earle McLaughlin, chairman of the Royal Bank of Canada, who had championed Johnson’s rise at Standard Brands. “Well, we figured it would happen,” McLaughlin said, but urged him not to move precipitously. When a special board meeting was set to discuss the matter, Johnson agreed not to resign and circulated the same message to his coconspirators. “Keep your powder dry,” he said.

Then, less than two weeks before the board meeting, a popular Standard Brands executive named Bill Shaw dropped dead of a heart attack. The cause, everybody believed, was extended overexposure to Henry Weigl, and while that postmortem was medically dubious, Shaw’s death did manage to crystallize the rebellion. “Ross, you’ve got to do something,” said Bob Carbonell, who ran research and development. “If you don’t do something,” sputtered Emmett, “we’re all gone.”

It all came to a head on a Friday morning in mid-May, when the directors convened. As Johnson waited outside, Weigl recited the litany of abuses his auditors had found. Weigl concluded by proposing a two-year extension of his contract.

As his cronies wandered Central Park, Johnson was ushered in to address the board. He admitted to minor expense-account violations, but said he wasn’t going to fight Weigl any longer; the man was impossible to work for. “Gentlemen,” he said, “all I can tell you is I’m resigning.” What other executives would do, only they could say. Then he offered up the bleak analysis of Standard Brands that he and his pals had prepared. “The shit is going to hit the fan within twenty-four months,” he predicted.

Johnson left the room while the board caucused, and when he returned, Weigl was no longer in the chairman’s spot at the head of the table. Instead he was sitting partway down it, white as a ghost. “Ross, here’s what we’re planning to do,” a board member said. “Henry will continue as chairman and chief executive officer, and you will be made the president
and chief executive in another year, when he retires.”

Johnson should have been thrilled. Instead, he said, “That won’t fly.” He stepped out, then returned to a new offer: Weigl would remain chairman until his retirement, and Johnson would become chief executive immediately. Johnson approved, “with one provision: that Henry’s office won’t be in the headquarters building.”

That bit of hardball brought Johnson command of a New York Stock Exchange company. Afterward he and the Merry Men toasted their victory with martinis late into the night. It had, they agreed, been a splendid coup. It wouldn’t be their last.

Henry Weigl ultimately exacted a small measure of revenge. Some time later Johnson, looking for a Florida vacation home, bought a splashy yellow villa in the exclusive Lost Tree community in Palm Beach. Life at Lost Tree revolved around its country club, but by the time Johnson applied for admission, Weigl, also a Lost Tree resident, had begun a campaign to blackball him. Embarrassed, Johnson withdrew his application and ultimately moved up the coast to a town named Jupiter, where he bought and combined a pair of oceanside condominiums. A Johnson supporter in the coup, the director Andrew Sage, bought his Lost Tree home. “When Henry is dead and buried thirty years I’m still not going near his grave,” Johnson said years later, “because I just know a hand is going to reach up through the ground and grab me by the throat.”